from w-w-bb:

19.01.2007 - Total Rocketscience

The third and final company making up our Risk / Reward trilogy on shares for 2007 has so many investment negatives that most observers might not even give it more than a cursory glance. Although quoted on the London AIM market, it is based on the other side of the World, has reported revenues and cash flow of diddly squat and, more importantly, operates in an area of expertise so deep in boffinland that you need to be at least a 5 star techie to venture anywhere near it.

What originally persuaded us to give it a second look was the fact that legendary Stockmarket investor, Jim Slater, was pouring money into it via several successive rounds of financing. As we all know, Mr. Slater is a qualified accountant and hugely experienced corporate financier but clearly he is more at home in leafy Surrey than in the technologically rarified atmosphere of Southern California. However, he must have gleaned enough about what the company actually did to get extremely excited about it. In fact, by last Autumn, he had grown to like it so much that, to paraphrase the immortal Victor Kiam, he bought the remaining 51 % of the company that his vehicle, Original Investments, didn't already own.

The company in question was VIALOGY and, ever since it was fully reversed into Original just before Christmas, Slater's loyal band of followers have seen their highly speculative penny punt move on to the calculated risk category and been duly rewarded with a 50% shareprice improvement. We first latched on to this situation last April when we wrote a piece entitled The Cisco Kid ( see news archive ). To recap briefly, the company was set up by some brainboxes who had earlier worked together on supercomputing projects for NASA. Led by Dr. Sandip Gulati, the team appeared to have perfected software to detect and enhance extremely weak signals previously obscured by background noise. This may not seem particularly earthshattering to the layman but, apparently, the applications for this technology are not only revolutionary but almost limitless which suggests that an exponential rise in licensing income could well lie ahead.

Big news clearly travels fast on the Eastern seaboard because global behemoths Cisco and Boeing have already enlisted Vialogy to work on 2 major government inspired projects and these are just the ones that the company have been allowed to talk about publicly. As we reported in April, Cisco has contracted Vialogy to help with its IPICS programme which seeks to make sure that all emergency services and government agencies can communicate with each other quickly via computers and phones. The need to address this obvious requirement was highlighted by 9 / 11 when communications between different departments with different systems proved chaotic.

For its part, Boeing has recently confirmed that Vialogy has delivered a tenfold improvement in the accuracy and efficiency of the types of gyroscopes it uses in spacecraft and missile navigational systems. It is also known that both Cisco and Boeing see a major role for the technology in such areas as border controls and missile defence systems. Elsewhere a much smaller Texan company, Evolution Petroleum, is applying the technology to improving seismic evaluation of oil and gas deposits.

This initial clutch of applications is almost certainly just the tip of a very large iceberg that is going to float into view over the next few years and all that is required is a little patience. At todays price of 5.5p, Vialogy is valued at a mere 22m. To justify this valuation, the company would have to be earning say 2 million pretax. With cash reserves of 3 million and its heavyweight partners funding the projects it is involved in, Vialogy should be able to get through to breakeven without further recourse to shareholders. We would expect this stage to be reached sometime over the next 12 months. Thereafter, profits could / should escalate very dramatically as new applications and licensing income start to snowball.

On a two year view, shareholders could be rewarded extremely handsomely indeed. Vialogy is in so many ways akin to last weeks selection, CORAC. Both are now moving from the development stage to commercialization with the scales tipping away from blue sky risk towards the reality of cash flow. Both have mindblowing upside potential yet both have current shareprice action that makes drying paint look positively orgasmic. Although this presents an opportunity for latecomers, it is a frustrating byproduct of both companies involvement with highly sensitive technology and powerful, publicity shy partners. Moreover, the present lack of any meaningful numbers together with the sheer scale of future potential makes any serious stockbroker research well nigh impossible. All this will resolve itself in due course but, as they say in the Grolsch advert, all good things come to those who wait.

This is dilution of existing shareholders who have not been invited to subscribe at bargain-prices. It isn't much money, so expect a repeat - that's over and above the Warrants which add further dilution.....anyone buying above 4-5p is paying too much for this "Jam tomorrow, pass the sugar" company.


It's one of the few deals St Helens Capital have achieved this year - good luck - see their sp. also.

You beat me to it hangon. 4p seems like a bit of a slap in the face for existing shareholders.

at least it's done now, hopefully we can move forward after the next RNS without the threat of a placing holding it back.

This thread has the wrong Subject-line, IMHO!

Today the sp went up on 1m buys and 250k sells, yet there was another 250k marked(?) below the Buy price, so it might be nearer to 1:1 - yet MM's push this to 5.25p and 8% uplift.

I'm not following you, StillWaiting: It may be [VIY] can move on ( although I don't hold, it's a watch and wait for me), yet this money raised isn't much and the Warrants tell me the financiers were not too sure either.
This stock has been ramped several times into double figures, so those folk (if still here) have been massivly mis-led....and did VIY tell them they knew no reason....of course not! Companies will allow their sp to rise to the level of dross if only because it allows Execs to bask in the sunshine, even if only briefly.
If it had been worth 12p+ then further orders/repeats etc would remove the need for a funding - and this is about the worst time in Economic-cycle that a Co. could go begging.
I suspect ( BUT do not know!) London AIM market is seen as a source of cash and no-one is too worried if UK shareholders get a return, other than from Market manipulation, that's ramping when you look back....otherwise what have you invested in?
Clearly your 12p's have funded speculators who found a route to Riches - and this 4p funding shows they were really wrong. Let's not forget it isn't 4p, either - there are Warrants too, so that will hold-back sp.
And it wasn't 12p you paid- it was more, because of the dilution effect.

Also, there is the technology risk - when punters tell you this company has IP up their eyes and huge profit potential from this/that I wonder where they read this drivel? The only profits that are believable are in the Accounts and dividends are the proof - everything else is Puff!

18months ago this thread was blowing hot at 5.5p ( probably 6p to buy then), which represents nearly 50% up on the Funding. Those posts suggested break-even by 2008 - yet I suspect we could see another fundraising before that happens - you just cannot trust Execs with your money! - Er, IMHO.
I might pay 4p -but only if their story holds up, yet I suspect chatter (here?) will keep Buys above this, unless there is some disaster, which no-one wants.
But not more...this is a US-based company and you cannot go round and check them up...if they delist from AIM you've caught a cold and as I do not know them, why risk it, that's my position.

Good luck to all who sail in her.
+ Do read the first-posts and realise. . . how far down the line your investment is, . . . after all the Movers have taken their slice.

Yes - I think this is going to go ballistic very soon*


(*within the next 6 weeks)

oil application is worth 5-10 times current market cap alone, imo

add in all other applications, eg pipeline survey, env. monitoring, military base security, medical etc etc, and this is a time bomb waiting to go off!

all imo, dyor!

All though I am a holder, what I cannot understand is with all of the excitrement, I would have thought that they would have been able to raise a lot more money and at a slightly higher price. Why 1.8m and not round it upto 2-3 million ??

Hopefully the test results from the drilling will be excellent which should give confidence to all long term holders and a move up northwards for the SP.

because they only had authority, without going back to shareholders, to issue up to 10% extra shares, ie 45m.

Heavy buying this morning. Dose anyone know if Atascosa have found oil or what is behind todays rise.

Oilyrag, they were tipped in RHPS over the weekend...

SP21, any chance of posting details contained in RHPS articel or even the general consensus ?

Pumben I don't have access to the rhps article but I've heard that it contains a 15p price target - hopefully if the results from the oil wells and the pipeline surveys are good this will take us some way towards that.

However, with these results (at least the oil) expected in the near future I would have hoped that the price would star to creep up in expectation so am a bit concerned that it has not done so.

I'm not sure if it is related to the placing of shares which took place approx a week ago. however even though I would love to see the SP at 15p it needs t ostart moving pretty quickly !!!

Big numbers again , news on its way ?

strewth! you're right .... about 10m against norm of 2m

That's about how many I've got. Sitting along with my GOO shares!!!
News? Don't tell me, U.S. gov are bailing out VIY as well as FM/FM?!!!

CAn someone explain something, has Jim Slater sold all of his shares or has he just moved them around to a trust or something. There have been a extremely large number of sells since the news on Jim Slater holding. Does anyone know when the results are due from the oil well ?

He has added to his individual holding (by 3 million announced on 10th Sep) while reducing from his investment vehicle Artemis.

Comments elsewhere have suggested results from the oil drilling might be due later this month.

ViaLogy Plc ('ViaLogy' or 'the Company')

Projects Update




Pasadena, California - 29 September, 2008: Vialogy PLC (AIM: VIY), the AiM-listed technology company, is pleased to announce significant developments in three of its major projects.




Software installation in military base




The Company has been awarded a sub-contract from a major US defense system integrator for the insertion of ViaLogy's sensor interoperability platform software into an operating military base security system. ViaLogy will integrate the multiple perimeter surveillance systems on the base, simplifying operations and eliminating system failure in security deployment.




More detailed information on the project and the names of the systems integrator firm and the specific military base cannot be disclosed for national security reasons.




In addition, SPM was recently deployed by Los Angeles County first responders at a major sports event attended by over 90,000 fans to demonstrate and assess effectiveness in providing advance warning and crisis management in the event of a chemical or biological terrorist event. Following this success, LA County also deployed SPM to co-ordinate security and surveillance at the 60th Emmy Awards ceremony in Los Angeles.




'The diversity of these SPM applications helps to position the product as the certified CBRNE (Chemical, Biological, Radiological, Nuclear and Explosive detection) and physical security sensor integration engine for purchases of enterprise-grade systems. We anticipate future customers will include state, local and federal procurement agencies, including the Department of Homeland Security, and system integrator firms', said Terry Bond, ViaLogy's Chairman.




New dates set for Oil & Gas validation




Hurricane Ike has caused a brief postponement of the ViaLogy-Atascosa Engineering partnership plans to drill its first well and thereby prove the value of ViaLogy's Quantum Resonance Interferometry (QRI) technology which is being used to determine the oil reservoir's location, capacity and porosity, as well as the exact drill site. This adaptation of QRI is branded QuantumRD.




'Ike's unpredictable progress through Texas meant we had to delay preparations for erecting the drilling equipment', said Mr. Bond. 'At one point it appeared that the site, near San Antonio, would be in the eye of the storm. Fortunately it transpired the area was on the perimeter and we sustained minimal damage.'




While the project is a pilot, this is a fully operational extraction site and a strike should substantiate the effectiveness of the technology in the oil discovery process. Drilling is now scheduled for mid-October and results will be available towards the end of that month.




Aerial pipeline surveys in October




The second imminent application for QRI, called QSUB, will be used to determine exact geolocation and condition of underground oil and gas pipelines. Proof-of-concept flights by Sky Research Inc of Ashland, Oregon, www.skyresearch.com, organised by ViaLogy and its partner firm ASTFS, are scheduled for this October. The aim is for QSUB technology to analyse data from airborne synthetic aperture radar (SAR) and light detection and ranging (LIDAR) sensors. ViaLogy has received strong indications of interest from leading pipeline firms in the success of the proof-of-concept work and in purchase of the operational service when available.




'There are almost 3 million kilometres of buried pipeline in the US alone', said Mr. Bond. 'A cost-effective means of providing exact pipeline location and status is in high demand by both pipeline firms and regulatory agencies. We believe that the latest radar equipment, combined with QSUB data analysis will enable this to be done by aerial surveys.'

On the road to nowhere.